Oligopoly, Monopoly, And Costs

1861 WordsNov 16, 20148 Pages
The New York Post’s business article, "Comcast-Time Warner Cable Critics Fired up," written by Claire Atkinson and Josh Kosman, discusses the Comcast and Time Warner Merger. Comcast has a deal with Time Warner that Comcast will pay $48.5 billion for the company. This deal is currently being reviewed by FCC. There is a possible violation of antitrust laws, as this deal may cause Comcast to be a monopoly of the cable industry. Many companies, like Amazon, Netflix, Dish Network, and Discovery Communications, are leading the attack against the merger. Critics of the deal are claiming that Comcast is in violation of Section 7 of the Clayton Act and the merger will cause harm to competition and consumers (Atkinson). The purpose of this paper is to explain oligopoly, monopoly, and costs because they helped me under stand Atkinson and Kosman’s article. The first concept I am going to discuss is an oligopoly. There are several characteristics that make up an oligopoly. One characteristic is that there are many firms in the industry but only a few firms that make up the majority of the market share. In the United States soda market, three firms (Coca-Cola, Pepsi, and Dr. Pepper Snapple Group) make up almost ninety percent of the market (Schiller, 246). Another characteristic is that in an oligopoly, the oligopolists have substantial influence over price (though one oligopolist is usually the price leader). This market power is determined by the number of producers in the industry, the
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